Merryn Somerset Webb

The labor market is soggy.

Firms do not have pricing power.

Workers do not have pricing power.

The upwards impetus to inflation, therefore, will be significantly less unless the war is a forever war.

And as a result, I'd be surprised if the bank and the Fed were to raise rates this year if energy prices remain at or close to where they are right now.

This is a time for sitting gleefully on your hands and seeing how the world pans out.

And that would be the mainstream economist's view.

I'm very far, as you know, from being a mainstream economist.

On this occasion, my tribe might even have got it right.

Very, very unusual.

What about house prices?

Obviously, we've been looking at house prices quite a lot on this podcast and we're fascinated by the real terms decline that we've seen so far across the UK and particularly in London.

And that has positives in that it makes houses more affordable.

But of course, with mortgage rates slightly higher than they were, however affordable they may look in absolute terms, they still become less affordable as mortgage rates rise.

Yeah, yeah.

Well, I mean, I suspect a bit like for interest rates, we might find for a period the housing market tracking sideways.

I mean, it's not just about rates, although, of course, we've seen

many mortgage products just appearing off the markets and fixed rates picking up.

But this is coming alongside and on top, of course, of concerns about jobs.

We've had the jobs market now weakening.